Michael OlsonBy Colin Campbell
If Tax Debate Goes Unresolved Minnesotans’ Paychecks May Take a Hit
With a tax-package set to expire in less than six months, Congress and the White House are in a debate over which income groups should continue to get breaks. If the deadlock endures, and a compromise isn’t agreed to, middle-class Minnesotans could see their taxes go up by more than $1,200 next year.
Storified by Minnesota Today · Fri, Jul 13 2012 04:17:29
President Obama met on Wednesday withDemocratic leaders about his initiative, announced Monday, to renew theBush-era tax cuts for another year but end breaks for individuals making over$250,000 a year. With the media income in Minnesota at $57,243, according to 2010 Census figures, most taxpayers wouldn’t be affected if Obama gets his wish and the breaks end for those making over $250,000. But if the Republican-controlled House refuses to pass the renewal outlined by Obama and the President stands by his promise to veto any extension that doesn’t end the tax cuts for the highest earners, there may be a stalemate that lasts into 2013, past the date the taxes are set to expire. Such a scenario would lead to across-the-board tax hikes for all income earners –a result that would affect Minnesotans, rich and poor.
The debate over the taxes has come up forrenewal votes once before during Obama’s presidency and while he pushed for asimilar proposal during to 2010 debate to end breaks for the highest earners,he couldn’t muster the 60 votes necessary to move legislation through theSenate. Unwilling to let the tax cuts expire as the economy was beginning torebound from the recession, Obama relented and renewed the breaks for all income earners.
“His position is clear. It is for $250,000” — White House Press secretary Jay Carney
If the current stalemate slogs past Jan. 1, 2013, the date the tax cut is set to expire, most Minnesotans will find themselves paying between $1,843 and $3,429 more intaxes next year. Also worrisome for Minnesota families is the child tax creditwhich would drop to $500 from $1,000 if the Bush-era breaks aren’t renewed. Fora Minnesota family with three children that can be the difference of $1,500 a year.
